It has been two years since the CRTC issued Telecom Decision 99-10, but it still remains underutilized and, for the most part, misunderstood.
March 1, 2001
In August of 1999, the Canadian Radio-television and Telecommunications Commission (CRTC) issued an important decision for the cabling industry called Telecom Decision 99-10. Decision 99-10 changed the responsibility for installing and maintaining in-building copper telephone wire in multi-tenant buildings from the incumbent local telephone companies to the building owners. In reaching its decision, the Commission demonstrated the importance it places on open access to end-users; the inability to access wiring to deliver service to end-users and the existence of exclusive access agreements between companies and building owners were viewed as significant threats to end-user choice.
Although it is almost two years now since the issuance of the decision, it has prompted little awareness or activity. Two factors have influenced this inactivity. First, patchwork solutions have resolved wiring issues in the relatively few new multi-tenant buildings constructed or renovated in the last year and a half. Second, members of the building management and telecom- munications industry have been waiting on the outcome of subsequent CRTC decisions that relate to this same area. However, over the past year it has become evident that there is a lack of concise information readily available to members of the cabling, building, and even the telecommunications industry. Few are aware of the changes stemming from the decision, and even fewer know how to effect these changes.
This lack of awareness puts those involved at a disadvantage. It is not exaggerating the importance of Decision 99-10 to say that it has significant financial and process implications that will profoundly affect how building owners and local exchange carriers (LECs) interact with one another. Decision 99-10 was crafted as an attempt to remove the supposed advantages that incumbent telephone companies had over the new competitors, thereby encouraging end-user choice. It accomplished this by removing the incumbent telephone companies as the hurdle and placed the building owner in the position of telecommunications gatekeeper.
THE NEW RULES
Information and involvement has been disproportionate for the two sides involved. For the most part, telecommunications firms have followed the evolution of this decision from the very beginning, and remained active at the CRTC to ensure that their views are recognized. On the flip side, building owners generally have less involvement, and lack of definitive information has been the greatest cause of surprises for those involved in the construction of multi-tenant buildings.
There is much to understand regarding the principles of Decision 99-10. The responsibility that has been transferred concerns only copper telephone wiring beyond the demarcation point in the main telephone room. The demarcation point is the point at which responsibility is divided between the feeder facilities of the LEC and the in-building copper wiring. Intuitively, we then know that the location of a building’s main telephone room is where the demarcation point is located.
The decision automatically applies to all multi-tenant commercial, industrial, and residential buildings constructed after August 1999. For now, consider multi-tenant to mean a building with more than three units served by a common copper wire infrastructure. It also applies automatically to any multi-tenant building where a major renovation results in the entire building being vacated of tenants and all previous in-building copper telephone wiring is removed. A good example of this is the conversion of a commercial building to condominium apartments.
A very simple way of determining building owner responsibilities is to go through the simple decision tree in Figure 1. In a few short steps, a building owner can ascertain how the decision will affect his situation. For instance, the transfer of responsibility of wiring in a multi-tenant building constructed prior to the issuance of Decision 99-10 is not automatic. Building owners that want responsibility for their buildings’ wiring must it, in writing, from the LEC. In fact, building owners may request responsibility for the wiring of all LECs (all incumbent telephone companies and competitors) that have placed copper telephone wiring within the building, not just the incumbent’s. Recognizing this, some LECs have begun creating template ‘transfer of responsibility’ documents with the expectation that more building owners will want to take on this responsibility in the future. However, building owners who want this responsibility may have to contend with the idea that some wiring may still have some residual value, for which the LEC may want compensation. Currently, there is no prohibition against this.
WHAT’S IN IT FOR OWNERS?
Since 1997, the Building Owners and Managers Association has fought for the right to control the activities of the LECs on their private properties. This would include control of LEC wiring installations, removals of dead wiring, licenses for building access, and leases for equipment rooms. Decision 99-10 gave building owners direct control over some of these activities. Whether assigned automatically by the rules or willingly requested by the building owner, some major responsibilities go along with that role. The supply and maintenance of in-building wiring, managing moves, adds, changes, and repairs to the wiring, as well as billing and the always ominous “liability”, are just some of the considerations. Managing these elements is no small job, which may account for the apparent lack of interest by building owners in requesting this responsibility.
However, for those in the process of designing or constructing new multi-tenant buildings, it is time to start tabulating the costs of supplying, installing, terminating and managing the in-building wiring, and maybe figure out how to get it all back. Budgeting for future wire management activities reveals that it is a very expensive undertaking. The costs that were previously incurred by the LECs must now be incurred by the building owner and charged back to the appropriate parties.
Some building owners have opted to employ riser managers to incur the costs and charge them back to the users. Others have partnered with building-centric LECs willing to undertake this task for a fee and/or the right to serve the tenants. The key is that the upfront costs of delivering service get lower for the incumbent local exchange carriers (ILECs) as the building owners start to manage the in-building costs.
Now under debate at the Commission is Public Notice 2000-124 (which can be found at www.crtc.gc.ca/partvii/eng/8644/ c12-03.htm#1a on the CRTC website). The decision that will result from this public notice may have implications for building owners that are as significant — maybe more — as the implications of Decision 99-10. The topics of debate in PN-124 are the fees, charges and other terms and conditions relating to building access by LECs in multi-tenant buildings.
While there are many facets to this debate, the two main sides involved are the building owners and some telecommunications companies. Building owners are fairly unified in their belief that all LECs should have to pay fees to access a building. These fees may include lease costs, use of wire or riser costs, and other applicable costs of doing business. However, some of the telecommunications firms, particularly incumbents with huge inventories of served buildings, argue against the building owners’ justification for such costs. Incumbents really have the most to lose if they are ordered to initiate discussions with building owners to negotiate access agreements and begin incurring associated costs. Yet, additional issues — such as whether or not the CRTC has jurisdiction over the property managers to the extent that they can tell them what they can and cannot charge on their private property — are also relevant.
The most recent decision by the CRTC in support of a teleco
mmunications firm’s right to make use of a third party right-of-way is Decision 2001-23. This decision offers a glimpse into the Commission’s state of mind on the issue of obstacles to a competitive telecommunications environment in Canada. How they might bring effect to a similarly applied principle in the current Public Notice remains to be seen.
Like it or not, these are the new rules. They have a way of being changed, bent and refined, but unless a major flaw is revealed, they will stand. Public Notice 2000-124 is just such a refinement.
The cabling industry, designers, architects, engineers, and telecommunications professionals have a responsibility to stay abreast of the ongoing changes that affect their fields. Yet there have already been instances where building owners were completely surprised to learn that they were going to be responsible for the costs of installing the in-building telephone wiring in their new multi-tenant buildings.
A major step towards eliminating such surprises is for all members of the telecommunications industry to promote accurate education that spreads the word on key decisions. For those who want further information on regulatory issues, the CRTC web site (www.crtc.gc.ca), where all decisions and various company positions on CRTC decisions and public notices reside, is a good place to start. You can also register for automatic e-mail updates from the CRTC at www.crtc. gc.ca/subscribe.htm.
In the end, the key to creating a comprehensive approach that deals with the impacts of Decision 99-10 will be for both the telecommunications and building industries to begin developing the necessary internal processes to smoothly manage the transfer of responsibility.CS
Renaud Campbell is a Project Director for Davnet Canada Inc. He is a BICSI member and most recently spoke on the subject of facilities-based competition at the organization’s winter conference in Orlando, Florida.